Juice: Picker’s Picks

5 Jun 2018

Editor’s note: Like Grateful Dead archivist Dick Latvala “picked” the band’s most energetic concerts for release as albums in his “Dick’s Picks” recordings, California Public Utilities Commission President Mike Picker picks the best resources to release energy to the Los Angeles basin’s grid to keep the area rockin’.

A proposed decision to deny Southern California Edison ratepayer recovery for 125 MW of local demand response, energy storage and energy efficiency projects in the constrained Los Angeles Basin would be counterproductive if approved.

Administrative Law Judge Patricia Miles’ proposal to reject 60 MW of front-of-the-meter storage, 55 MW of demand response and 10 MW of customer energy storage projects in the polluted and resource-challenged region fails to see the big picture.

Although the cost of the contracts and some other details are confidential under state law, the contracts’ overall plusses are known.

Edison’s proposal to use locally placed clean and preferred resources would help address local capacity needs and advance California’s lauded carbon-lite goals.

Consider that state and federal grid operators and agencies have repeatedly warned about reliability threats in the Los Angeles Basin. Most recently they’ve cited limits at the Aliso Canyon natural gas storage field, but before that it was the loss of 7,000 MW of capacity with the closures of the San Onofre Nuclear Generating Station and planned closure of old and inefficient coastal power plants.

The utility’s contracts would promote the state’s loading order, which gives top billing to energy efficiency and other clean energy resources.

The pilot projects also would test how well local preferred resources offset the need for fossil fueled generation and help revamp the grid to meet a changing resources landscape.

A looming question is what is the alternative to these 19 deals? Is it controversial and pricey backstop procurement by the California Independent System Operator  for gas fired plants?  Maybe, but maybe not.

Thankfully, the California Public Utilities Commission delayed acting on the proposed decision to reject the portfolio of contracts at its May 31 meeting. That gives it time to weigh an alternative proposal that views the deals through a wide angle, rather than narrow, lens and consequently would approve them all.

Earlier in May, Sen. Nancy Skinner (D-Berkeley) urged the commission to approve Edison’s contracts. She warned that Miles’ proposal may signal “that gas fired generation remains the primary answer to ensuring grid reliability, it also sends negative signals to [distributed energy resource] developers and could chill future interest in utility solicitations.” She further insisted the deals would be good for the state’s clean energy goals, help bring down the cost of distributed energy and would be good for Edison ratepayers.

Commission President Mike Picker agreed and released an alternate decision last week.

His proposal would approve the preferred resource contracts because of “the magnitude of their collective expected contribution to local system reliability, existing Commission programs, and larger state policy goals, such as grid modernization, [distributed energy resources] penetration and greenhouse gas reductions.”

One of the key problems of Miles’ proposal is that it creates an artificial divide between it and related proceedings and policies. For example, it would not allow Edison to count the storage deals towards its 580 MW storage mandate by 2020, nor towards the required 169 MW of local preferred resources or storage under the Long Term Procurement Plan. Picker does away with those walls.

At the same time, Picker addresses valid concerns cited in Miles’ proposed decision by the Office of Ratepayer Advocates over the lack of metrics needed to measure how Edison’s contracts would help meet the goals of various commission alternative energy programs and policies. He would include “careful monitoring” of the pilots to ensure the clean energy local capacity needs were being met. His proposal also mandates that the utility file annual reports that include the contracts’ costs and benefits.

The CPUC president’s alternate also puts ORA’s concern that the deals are not cost-effective into a larger context. He compares them to other policy programs to advance desired alternative energy, including for storage and demand response to address limits on gas operations at Aliso Canyon, the renewable auction mechanism and renewable feed-in tariff.

The alternate states that the cost over 20 years for the average ratepayer would be 20 cents a month. It is hard to disagree with its conclusion that would be a “reasonable financial investment in attempting to secure a more certain future that will be increasingly dependent upon [distributed energy resources].”

—Elizabeth McCarthy

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